The economic cost of extreme weather events

A new study, commissioned by the International Chamber of Commerce and conducted by Oxera, offers an in-depth look at disaster-related economic losses.

It examines a decade of data since the signing of the Paris Agreement in 2015. The findings indicate that without enhanced climate action and mitigation efforts, the economic burden of climate-related extreme weather events will persist and likely grow.

Here are the key findings of the report:

• Nearly 4,000 natural disaster events between 2014 and 2023 have generated total economic losses estimated at $2 trillion in 2023 prices.

• The estimated impact only captures a small part of the impact of climate change so should be considered a lower bound, with the true economic impact likely orders of magnitude greater.

• The figure includes the economic cost associated with the destruction of physical assets and human capital losses in the form of early deaths, injuries and health issues.

• Approximately 1.6 billion people have been directly affected by these events in the decade from 2014 to 2023.

• In 2022 and 2023 alone, global economic damages reached $451 billion. This represents a 19% increase compared to the annual average from the preceding eight years.

• The economic toll of a single extreme weather event on smaller, vulnerable nations can be especially severe, in some cases eclipsing a country’s entire annual output. For example, we estimate that Hurricane Maria in 2017 had an economic cost equivalent to over 300% of Dominica’s gross value added (GVA) for that year.

Read the full report here or visite the Website of ICC Global for more information

The economic cost of extreme weather events